My husband and I have been interested in investing in real estate for quite some time though we had some debt and other issues that we needed to clear up and now I’m pretty sure that we are ready. Here’s the situation:
I am a stay at home mom and my husband has a healthy full time steady income/career. In terms of Debt and assets we have the following;
Debt = monthly car payment, monthly mortgage payment on our personal residence, student loans and three CC at a $0 balance.
Assets = some investable cash
We have been approved by Wells and Bank of America for mortgages on investment property. We asked for 60K and the terms were; Wells 60k with 20% down on a single family 25% down on duplex and 30% on muti unit dwellings for 30yrs at 4.625%. Bank of America basically offered the same deal with a higher rate of 5.2% (maybe this is because we have more of a relationship with Wells, who knows!)
So what are the concerns? We have sat down and came up with a plan, our short term goal is to acquire 5 residential rental properties per year for the first four years and then we will reassess our goals at this point. Of course the idea is to begin to create passive income (knowing that a reasonable amount of work will be required through the process) so that we can begin to build long term wealth for our family (we also have 4 children).
The issue is that the banks will only issue 4 mortgages per person and this includes our personal mortgage. Therefore will we only be able to acquire three mortgages through traditional financing. As of today Wells is saying that we can acquire a total of 175k in additional debt before being at the max for DTI. My first concern is if we purchase three single family properties with a 60k loan amount after down payment we will be cash strapped and out of traditional financing options.
My second concern is, my husband works for a company that moves us around quit frequently, we will more than likely relocate again in two/three years for his next promotion. We moved from Kennesaw GA (a suburb of Atlanta) 18 months ago and we loved it there so much that we want to invest in that area, but of course we are not there to physically take care of the properties so we would need to have a team in place. We could purchase were we currently are but we wont be here forever either and the market is not as great. We are natives of Pittsburgh PA which is also an option for investing because we have family there and I have a PA real estate license. Most investors I have spoke with say “never buy rental properties in a city where you don’t live” I understand this way of thinking but it may be another three years before we are in a city that we will stay in for 5+ years. I want to invest now while the market and rates are great.
Does anyone have any suggestions on how to get started?
Should I be concerned about the fact that I don’t live where I’m investing?
What’s the most strategic way to get started considering my current situation and my 4 year goal?
Should get a reciprocal license in the city where we invest so that I can access the Multi list and refer or do my own deals?
How do I get around that 4 mortgage limit situation on investment properties?
I would appreciate any suggestions.
PS. Please respond in lay terms, although I am licensed we moved two months after I obtained to the license so I am a novice and I am also in no way an experienced investor